Synthetix’s Coming Perp Dex 🤺

Synthetix is launching a new perpetual decentralized exchange (PerpDex) on Ethereum mainnet, moving back from L2s to offer a competitive, trader-friendly platform by combining off-chain order matching with on-chain settlement.

• Synthetix is launching an L1 PerpDex on Ethereum, combining off-chain order matching with on-chain settlement to attract liquidity.

• The PerpDex prioritizes trader experience and asset security by keeping margin on Ethereum mainnet, aiming for sub-50ms order matching speeds.

• A public trading competition with prominent traders will precede the launch, providing feedback and generating significant attention for the new exchange.

Synthetix is re-entering the PerpDex market with a new version launching directly on the Ethereum mainnet, aiming to provide a 'canonical' decentralized exchange for the L1. This move addresses past challenges with L2 fragmentation and leverages improvements in Ethereum's L1 performance and a hybrid off-chain/on-chain infrastructure to attract liquidity and traders. The platform prioritizes a superior trader experience and aims to bring derivatives volume back to Ethereum, ultimately empowering DeFi on the mainnet.

Synthetix's Ethereum PerpDex

• 00:03:02 Synthetix's goal since 2019 has been to build derivatives and perps, having previously launched one of the first PerpDexes alongside DYDX. After initial challenges necessitated a move to Optimism (an L2), Synthetix is now returning to Ethereum mainnet with its fourth version, confident in its ability to offer a competitive platform by combining six years of experience with advancements in L1 capabilities and hybrid infrastructure. The strategy includes providing Ethereum L1 with a canonical PerpDex, filling a current gap in the ecosystem, as even centralized exchanges like Coinbase are launching perps, and every chain needs a robust PerpDex.

• 00:06:09 The decision to return to Ethereum mainnet for the PerpDex stems from the challenge L2s and sidechains face in attracting liquidity, a lesson learned from platforms like DYDX moving to Cosmos. Hyperliquid's success as an L1-based PerpDex further reinforced the belief that an L1 combined with a PerpDex is the optimal feature set. Synthetix concluded it could build a canonical PerpDex on Ethereum mainnet, despite the 12-second block times, by using an 'optimistic order book' model.

• 00:07:10 The new PerpDex overcomes Ethereum's 12-second block times by operating an off-chain, centralized order matching engine that batches and settles orders onto Ethereum mainnet. A key advantage of this architecture is eliminating the need to bridge assets off Ethereum, making it easier to attract liquidity and traders who prefer to keep their margin assets (like stablecoins) on the L1 due to counterparty risk concerns. While the order matching is fast, there will be a 10-second delay between order settlement off-chain and its recording on-chain, a trade-off designed to prioritize quick order matching with on-chain margin security.

• 00:12:31 The PerpDex will offer a degree of order book opacity by not exposing standing limit orders or individual liquidation prices, which Kane Warwick views as a feature to prevent 'stop hunting.' This design choice, along with other parameters, is being refined through a large trading competition involving top traders, allowing for feedback before the official launch. The competition will feature a public leaderboard and P&L updates, creating a 'spectator sport' to generate attention and test the system under real-world trading conditions with delegated margin rather than personal funds.